Divining market movement on moon motion might not work. Gurudeo "Buddy" Persaud of Orlando gave it a go and is now facing three years in federal prison.
Last year, the Securities and Exchange Commission charged the ex-broker with defrauding investors through an astrology-based Ponzi scheme that bilked clients out of nearly $1 million. In a plea agreement, Persaud was sentenced to prison this week for mail fraud and ordered to pay $948,340.00 in restitution.
According to the plea agreement and the SEC's complaint, Persaud was working as a registered representative at a Florida-based broker-dealer but separately formed White Elephant Trading Company LLC in 2007. Persaud pitched investors a "safe" and guaranteed return of between 6% and 18% by investing in stocks, futures, real estate markets and notes.
He apparently failed to mention to clients that his trading strategy was based on lunar cycles and the gravitational pull between the moon and the Earth. According to the SEC, Persaud believed that the gravitational pull between the moon and Earth affects human behavior, which in turn impacts the stock markets. For example, Persaud believed that when the moon is positioned in a manner that exerts a greater gravitational pull on human beings, they feel down and are therefore more inclined to sell securities in the markets.
The SEC's investigation revealed that from no later than July 2007 until at least January 2011 Persaud raised more than $1 million from investors in Florida, Connecticut and New York, but invested only a portion, instead using the money from later investors to pay earlier investors in a classic Ponzi scheme. He also used nearly $415,000 of the money to support his and his family members' lifestyles. Persaud issued phony statements to conceal the fraud from investors.The celestial trading scheme was apparently unsuccessful. On the investments that Persaud did execute, he lost $400,000 -- with net losses on trades from the very first month he received investor contributions.
Astrology-Based Investment Ponzi Scheme Lands Florida Man in Prison
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